tv Nightly Business Report PBS November 2, 2012 7:00pm-7:30pm EDT
captioning sponsored by wpbt >> this is n.b.r. >> tom: good evening. i'm tom hudson. susie is off tonight. 7.9%.-- that's the nation's unemployment rate as we head into the final weekend before the election. u.s. businesses added 171,000 jobs in october across many industries. four days after sandy, the gas crunch in jersey, access to cash in the northeast and controversy nixes sunday's running of the new york city marathon. that and more tonight on "n.b.r.!" we begin with jobs. employers beefed up their payrolls last month, adding more jobs than expected as more americans counted themselves among the labor force. the official labor department count shows 171,000 jobs were created last month. that's much stronger than the
125,000 analysts were looking for. and the government revised its september new job count up to 148,000. thanks to more people looking for work, the unemployment rate rose slightly to 7.9%. darren gersh has the story from washington d.c. >> reporter: the october employment report makes it clear a jobs recovery is solidly underway. >> i think the key message there is that employment growth has been taken up a notch. over the last three months we've added over 170,000 jobs on average. that's a little bit better than what we've been seeing. that is enough over the long haul to bring the unemployment rate down, but slowly. >> reporter: one of the best things about this jobs report: payroll gains were broad-based. retailing added 36,000 jobs. health care 31,000 jobs. construction 17,000 jobs. manufacturing shook off its recent losses, adding 13,000 jobs.
the unemployment rate did tick up to 7.9%. but even that may be a sign of strength. labor force participation had been falling as older workers retired and others gave up looking for work. over the last two months that trend has reversed and labor force participation is at its highest level in three years. >> that's a very good sign because it means job opportunities are increasing. it's drawing people in. >> reporter: wage growth was disappointing, edging down slightly, though earnings over the year seem to be keeping up with inflation. the drop-in hourly wages was no surprise to economists who say the huge pool of unemployment workers makes it hard for those with a job to snag a pay raise. but next year may be different. most economists expect growth will strengthen in 2013 and today's employment report points in that direction. >> given that we've had payroll gains of about 150,000 per month on average, i think it would be reasonable to expect something like 200,000 under a forecast of somewhat stronger growth.
>> reporter: you can count on the federal reserve to thoroughly dissect the numbers in this employment report. fed chairman ben bernanke has made stronger job growth a top priority. but while employment is moving in the right direction, the october reading may not satisfy the fed. >> certainly slower than they would like and i think even this report and the one prior to this one will be viewed as not a substantial change from the modest improvement that they've been seeing. so look for the fed to make more moves soon to keep this jobs recovery on track. tom? >> tom: of course, attorney, today's numbers come just ahead of the election. what are the optices, the political optics. how do the campaigns greet this report? >> reporter: tom, i'm sure you're going to be shocked to learn and surprised to elsewhere that the romney campaign did not greet the news well. they said it shows the economy is virtually at a standstill because basically the unemployment rate is where it was when obama was sworn in.
now the obama administration is pointing out they created more than five million jobs since the president took office in the private sector, that is. and also, if you look at the first full month the president was in office the unemployment rate was 8.3%. now it's 7.9. >> tom: instead of arguing about the data, what about the demographics here? because polls, obviously, show this is an extremely close race going into tuesday. so what about the key voting demographics in this jobs report? >> reporter: you know, one little nugget that i thought was very interesting, the unemployment rate for white men has fall tone 6.6% and about a year ago it was 7.8%. that is a key voting demographic, but interestingly enough, even though the unemployment rate is coming down, that demographic is going as much as two to one for romney. you know, sometimes demographic information and the unemployment information doesn't always sync up. >> tom: timing is everything in terms of synching up for
whoever wins next week and what party is in control of alcohol because they'll seemingly take over just as the jobs have shown steady growth for several months on end now. >> reporter: well, timing is everything in life, right? i mean, certainly the obama administration would have wanted to see these relatively strong job numbers three months ago because the standard sort of political wisdom is that you need about six months of job improvement for people to actually feel better and for the incumbent to benefit. this good news is coming a little late for the president. it's ironic, whoever wins is going to inherit an improving job market. >> tom: of course it comes plenty of early voting already under way across the united states. in washington, d.c. tonight, it's our bureau chief, darren gersh. >> reporter: thanks, tom. >> tom: still ahead, the new york city marathon is cancelled. what it means for advertisers of this world class event. that encouraging employment report didn't do much for stocks
on wall street. stocks opened higher, but sellers took over. the dow closed down 139 points, the nasdaq lost almost 38 points, the s&p closed off 13. for the week, the dow fell 0.1%. the nasdaq was down 0.2%. the s&p gained 0.2% this week. we'll talk more about the markets a little later in the program with our friday market monitor guest. he's duncan richardson at eaton vance. an update on the aftermath of hurricane sandy now. with temperatures dropping,
tempers are flaring in some areas struggling with no power and dwindling food and clean water. >> this is staten island. four days after hurricane sandy brought her destructive winds and devastating storm surge of atlantic seawater. across the hudson river from new york, some new jersey neighborhoods remain inundated with flood waters. low temperatures this weekend are forecast to be close to freezing. the official count from the department of energy had 3.6 million customers across 11 states still without power. getting around in affected areas remains a challenge. the new york subway system remains shut down in lower manhattan. commuter rail systems in the new york suburbs are on limited service, as are new york's three large airports. >> tom: energy also remains a concern. late today the department of energy announced it will release emergency heating oil supplies to relieve a supply crunch due to sandy. meantime, many gasoline stations in the new york-new jersey area have closed because they have run out of gas or don't have electricity to get it out of the pump. erika miller reports
>> reporter: six hours. that's how long drivers had to wait to fill up at this manhattan station. >> i got here at 6:00 am. >> reporter: the line stretched over 30 city blocks, but at least drivers could get gas. it's estimated that at least half of all stations in the metropolitan area are closed. in mount olive new jersey, some tried making the best of a bad situation but long waits are still not fun. >> it's scary. in my lifetime, i've never seen anything like this. >> reporter: given the high level of demand for fuel to run cars and generators, many stations are rationing supplies. and only taking cash. >> we are going to run out of gas in about an hour. >> are you cutting people off at a number? >> we just set a limit of $40 for customers. >> reporter: the gasoline shortages stem from the fact that energy companies are having difficulty delivering fuel. in addition, many refineries have been forced to halt production because of power outages and flooding.
dozens of states are sending utility crews to help restore power, putting more stations back in service. pipelines and tankers resumed limited deliveries today. and the government has issued a temporary waiver allowing non- u.s. oil tankers to transport fuel between the u.s. gulf coast and the northeast. unfortunately, the gasoline crunch is likely to get worse before it gets better. stations that have supplies are running out. and it may take several more days before they get more large scale deliveries. erika miller, "n.b.r.," new york. >> tom: as you heard, for those gas stations still open, some are only taking cash. with the power outages effecting a.t.m.s, some banks have put out temporary cash machines. j.p. morgan chase is one of those. frank bisignano is the co-chief operating officer at the bank. frank, i want to start in lower manhattan because late this afternoon you turned back on
a.t.m.s. how many are operational in that affected area still without power? >> well, we put a.t.m.s into operation at our flagship branch at it it chase manhattan plaza. that is in zone a, and zone a still does not have power. we brought generator power to our branch there, and we have that branch open and so there is cash available for the customer in that year. we are out there trying it serve our customer. >> tom: what about the entire affected area. as of today, 70% of chase's a.t.m.s were operational. >> we have more than 75% our a&ms operational. we have 80% of our branches open. we brought generator power in to our branches. we bussed employees to our branches. we're out there to serve our customers. we think having cash and the branches open is critical for our customers. >> tom: speaking of, what about cash supply? have you had ample supply in
order to staff up and meet the anticipated demand? >> we prepared for this storm. we prepared for the types of problems. we learned with katrina. we learned with irene. we started with much larger cash supplies than we normally would have, and we've been able to manage that cash supply at a much higher level than we have right now than we've ever had before. >> tom: have you been able to replenish the cash supplies in those a.t.m. machines in a timely manner? >> we have been able to replenish. obviously, there will be an a.t.m. here or there that has a problem, that runs out of cash. there are lines at many of these a.t.m.s in the difficult areas, but even as the longest time, it's within the same day it's replenished. we do have story where's we move cash from one branch to the other to help the branches keep cash. we've beefed up the security force toking in throughout the tristate area. >> tom: frank, let me pull
back a little bit from the day-to-day operations and i know you're focused on that. you have waived some bank fees for those affected customers in the region. is that going to be much of an impact when you talk about the fourth quarter business? >> i don't see this impact our fourth quarter business by waving fees. we think it's good business to be available for our customers all the time. and we need to understand our customers' needs. we've waived fees across the board in the consumer areas in order to allow our customers the ability not to have the stress of those fees on them and us be there to serve them. >> tom: the view of one of the biggest banks impacted by sandy. frank bisignano is the cochief operating officer at jpmorgan chase. j.p. morgan chase is among hundreds of companies lending a helping hand to the victims of superstorm sandy. corporate america has pledged over $50 million. the big bank is offering $5 million in loans to affected small businesses and donating to
the american red cross. other household names giving include coca-cola, delta airlines, disney, home depot, lowe's, the nfl and target. from fuel to cash to communications. verizon communications warned today hurricane sandy could wreak havoc on its fourth quarter earnings. the wireless, phone and internet provider took on major damage in the storm. four of its facilities in new york flooded. as sylvia hall reports, verizon's warning is a sign of the damage felt by the tele- communications industry. >> reporter: just like with other telecom companies, verizon employees are working hard to restore service to the northeast. but it's not easy when they're also pumping water out of the basements of their flooded new york facilities, which are running on generator power. the company announced today that sandy's aftermath will likely extend to fourth quarter earnings. analysts say the entire industry could feel it too. >> you can't hang an exact dollar amount on it, but when they come out this quickly and this early in the response, it's going to make a dent. i think people looking at the telecom space this quarter definitely need to realize that. >> reporter: in all, the storm knocked out a quarter of the
cell towers in its path, according to the federal government. but crews are working to restore power. yesterday, only a fifth were out of service by this afternoon, only 15% of cell towers were down. crews from all companies have gotten creative in their efforts to restore service. companies are deploying generator-powered makeshift cell towers to hard-hit areas and opening device-charging stations for people without power. a.t.t. and t-mobile are also allowing customers in hard-hit areas to use each other's networks until service is back to normal. here's some other relief for consumers in the hardest-hit areas. some companies are also suspending late fees and continuing service to those who haven't paid their bills. sylvia hall, "n.b.r.," washington.
>> tom: the continued slow improvement of the job market didn't help stock prices today with the major indices losing ground. the index saw a small pop at the opening bell, but couldn't maintain its positive momentum, even though factory orders had their biggest monthly increase in september in a year and a half. the s&p 500 sank into the close, ending down 0.9% trading volume on the big board totaled 791 million shares. it was 1.8 billion on the nasdaq. the pressure can from the materials sector, down two percent. energy falling 1.7%. and technology down 1.5% falling commodity prices weighed on some of their respective stock sectors. oil fell more than two dollars per barrel, settling at its lowest price since june. the u.s. dollar was higher on the back of the employment
numbers and a more expensive dollar can put downward pressure on oil. oil giant chevron also hurt the energy sector and the dow. chevron had the biggest percentage loss among dow stocks. chevron did not make as much money has anticipated in the third quarter. earnings per share were well short of estimates. similar to exxon mobil, chevron also saw its production and fuel sales fall, hit by hurricane isaac in august, legal troubles in brazil and a refinery fire in california. shares fell 2.8%, closing at their lowest price since july. two bright spots for chevron were its smaller refineries processing cheaper oil from montana and north dakota. meantime, chesapeake energy fell to a three month low, down 7.9%. the company has been trying to reduce its massive debt load. today the company said it may delay cutting its i.o.u.'s into 2013. the prospect of the delay was met with selling. you may have missed it but the ipad mini went on sale today. apple's newest product didn't have the usual hoopla.
still, analyst expect apple to sell one million or more of the devices during its first weekend on the market. apple stock continued its sell- off that began in the days after its iphone five announcement in september. today, shares fell 3.3%. they are down 18 percent from their all-time high in six weeks ago. solar stocks were not shining for the technology industry today. first solar dropped 8.9%. it cut its full year revenue forecast blaming disruptions in its supply chain thanks to hurricane sandy. sun-power fell 7.9% even though it had a surprise profit last quarter. sandy may also delay the u.s. government's selling of its stake in insurance giant a.i.g. according to an analyst at bernstein research. that stake was a result of a.i.g.'s bailout in 2008. shares fell 7.2%. a.i.g. has said it's too early to put a real cost on hurricane sandy. all of the five most actively traded exchange traded products were lower. the nasdaq one hundred and
russell 2,000 funds saw the biggest losses, down more than 1% each. and that's tonight's market focus. election day may be in four days, but president obama and the lame duck congress have less than two months to steer clear of the fiscal cliff-- the combination of tax hikes and government spending cuts scheduled to take affect in january. our market monitor this week says plan now for higher taxes soon, and higher interest rates eventually. duncan richardson is chief investment officer at eaton vance management. he joins us from that firm in boston.
duncan, i take it you're a pessimist in regards to avoiding the fiscal cliff that we're going to go over? >> not really a pessimist. i think the fiscal cliff is going to be more of a fiscal slope, but there will be a tax element to it. i think because we're starting at such a low level of tax rates, we're very likely to have higher taxes either immediately with the expiration of the payroll tax and potentially on capital gains and dividends in 2013 and beyond. >> tom: how should invests approach that, invest on what tax rates may be next year? >> not really. but there are great costs to be avoided by lessening the tax drag on your investment. positioning your portfolio and making sure you're in sthooks can outperform in a rising interest rate environment-- which is another thing we're worried about-- longer term makes some sense. >> tom: so rising interest rate environment, possibly higher inflation, higher taxes. not exactly the most shiny of
forecasts for investors. >> well, there is something you can do about it. you can avoid that tax drag by maximizing your investments in qualified plans. you can keep up with modest inflation by making sure you have your asset allocation mix >> allocation mix right. inflation picks the pocket of the bond investor. but dividends can keep up with a modestly rising inflationary environment. this is the test, this is a test. this is a test. this is a test. that cashe
a nice source of income for income-oriented investors. >> tom: health care meantime, continues to march higher, despite uncertainties regarding the election. what do you wait this? >> we like health care. it's actually done quite well, but their balance sheets are in great shape. there are uncertainties factored into price of the stock. we see great risk-reward there and again a sector where you might be able to get both the income replacement and a chance of increased income if you're looking out several years. >> tom: certainly your affinity for health care has paid off since last time we had you in the chair may 11 last springtime pup liked health care then. you also liked technol up less than 1%. it has really run into headwinds lately. any concerns? >> yeah, it's been a laggard with the exception of apple. but there's great balance sheet strength there. actually, the dividend increases in the technology sector have been one of the greatest anywhere else in the market. that and health care has great
dividend increases year over year. we see a lot to like-- cash-rich balance sheets, good demand verily but it will take some patience. >> tom: do you own any of the stocks. >> we don't own the e.t.f.s but we own the dividend paying blue chip stocks underneath them. >> tom: next week on "n.b.r.," it's the presidential election. from tuesday's vote, to the outlook for jobs and the threat of the fiscal cliff, we'll have complete coverage of the presidential election and its impact on the economy. and we check out an innovative program, between wal-mart and the cleveland clinic, providing surgical care to wal-mart workers. >> tom: the new york city marathon is considered one of the most iconic sporting events in the world. tonight, concerns about running that iconic sporting event, just miles from sandy's destruction has put the race on hold. mayor mike bloomberg moments ago issued a statement canceling sunday's race, saying:
"n.b.r.'s" ruben ramirez joins us with the latest. ruben, the mayor was pointing to the economic stimulus and the emotional lift this race would give new york. so what gives? >> that's right, tom. just a lot of people taking to facebook and putting calls into the governor's office, sources in the governor's office, telling me they were getting thousands of angry phone calls about the race still being run. and saying a lot of those resources should have been diverted or should be diverted to helping those that are still affected by the devastation that sandy has caused here in the city. the race was scheduled to be run on sunday. but it looks now that there are a lot of disappointed runners that will be here in the city least this weekend. a lot of those runners coming from overseas. and timely being able to get some of the flights into town. earlier today we were at the
expo center. for a lot of those people picking up their race numbers, excited about the marathon, but clearly disappointed this evening. >> tom: ruben ramirez in midtown new york tonight. mayor bloomberg one of those leaders you in the microscope with hurricane sandy. the election is about a lot of things, the economy, jobs, taxes but also about real leadership, and this week that's what lou has been thinking about, authenticity. here is author and educator, lou heckler. >> on a recent trip, my wife and i attended a church service where the sermon was about authenticity. it got me thinking about the best boss i ever had. this gentleman had that rare ability to be squarely in charge and yet make you feel like he always had your back. he demanded much of those of us working for him and was equally generous with rewards for a job well done. if you made an error he was concerned but forgiving and particularly focused on the lessons you learned. better still, we all knew this wasn't just what he did, it was who he was. howard schultz, founder of starbucks says it this way: authentic brands don't emerge
from marketing cubicles or advertising agencies. they emanate from everything the company does. if you have customers or employees, how would they rate your company's authenticity? the old phrase "fake it until you make it" may work in some situations, but not in this arena. i'm lou heckler. >> tom: finally, like millions of americans in the path of sandy, our staff has had to deal with the impact of the storm. thankfully everyone is safe. but our new york bureau is one of those millions of customers without power. many of our colleagues were quick to offer help. thank you to wnet, the nasdaq, the new york stock exchange, abc, thestreet.com, dow jones and bloomberg. we also want to thank you for watching the broadcast and visiting the website. that's "nightly business report" for friday, november 2. good night, everyone. we'll see you online at nbr.com and back here monday night.